Indigenous Affairs Minister Nigel Scullion knew late last year about a potential conflict of interest that ultimately led to the resignation of one of his advisers earlier this month.

Senator Scullion's adviser, William ''Smiley'' Johnstone, who held a majority financial stake in a business that operated within the minister's portfolio, resigned shortly after The Sun-Herald revealed the conflict.

Asked in Parliament last week what he knew and when, Senator Scullion initially declined to provide details. ''Like all members of this government, I take the statement of standards for ministerial staff seriously,'' he said.

The federal government's strict rules require ministerial advisers - who have influence over government policies - to cease involvement in businesses that could profit from ministerial decisions.

But the senator later provided an ''additional answer'' to the Senate.

He said Mr Johnstone completed his private interest disclosure, like all staff are required, after joining his office ''late last year''.

Advertisement

''After reviewing his disclosure, there were a couple of items that required follow-up,'' he said.

''This process was under way when we received a media inquiry [from The Sun-Herald] about Mr Johnstone's employment prior to joining my office.''

Senator Scullion said he ''moved immediately to clarify and address the issues raised'' by the newspaper.

''My office indicated to Mr Johnstone that he would need to amend some of his personal affairs, but as he never intended to stay in my office long term, he made the decision to resign.''

He insisted there was no ''intentional impropriety'' by Mr Johnstone and there was no conflict ''between his role in my office and the Indigenous Development Corporation''.

''Mr Johnstone has advised that he was not doing any work for the company while in my office,'' the senator said.

Australian Investments and Securities Commission records show that while working for the Indigenous Affairs Minister, Mr Johnstone remained the majority shareholder of Indigenous Development Corporation, a property development business that is on two of the government's ''standing offer'' lists of favoured suppliers. Both lists relate to Senator Scullion's portfolio of responsibilities.

During the same time, Mr Johnstone was also promoted as the founder and leading executive of lobbying company Indigenous Corporate Partners.

Senator Scullion has said Mr Johnstone had advised him that ''while he was a founder of the Indigenous Corporate Partners concept, he has never been a shareholder, director or service provider since it was founded approximately 18 months ago''.